> He's pointing out that it's a practical impossibility.
I'm not convinced that it is NOT financially viable. Especially in Switzerland where the governance is exemplary compared to other countries. I believe it is, only a real world example will convince me and Switzerland IMHO is the perfect country to run this experiment.
The fact that you equate taxation with extortion for example, shows that you have a different, not necessarily wrong, starting point than me.
> When they are rare, and limited, and like in Switzerland not something pulled on a whim but actually requires some work to call, they might just work.
In Switzerland you essentially vote on 2-5 issues every quarter. I think this very regularity has educated the people.
It also helps that by law, if you vote on a proposal that would increase spending, you aso vote on how much your taxes increase. In the case of the Gotard Tunnel it was 1.6% increase in income tax for several decades (if I'm not mistaken). Swiss even vote on buying fighter jets, etc. You would be surprised how well it works.
All that said, the swiss constitution actually states that it is the job of the government to make sure the people have a good standard of living. So many social policies which would be difficult to get through constitutionally in lets say the US are rather simple in the Switzerland.
My only big nitpick in the swiss system is the lack of minority protection an little to no checks and balances by the supreme court on referenda.
I imagine most folks here are American, but not everyone is out to get the average US citizen, some ideas just are good ideas and at some point they basically become universal. The US government is not some special meanie, in this case :-)
We already have a wealth tax. It's called "inflation." If the government wants to tax wealth, all they have to do is print money. The culture of living within your means and saving for the future basically died before I was born, so the point that this kind of policy punishes responsible citizens who are capable of living frugally, within their means, and saving the future is essentially moot.
Sales and income taxes are easy to implement because they're based around money actually changing hands. Property taxes are easy to implement because the physical thing that's being taxed is clear. General wealth taxes rely on accounting and valuation of illiquid assets, which is easily subject to gamesmanship.
If this was implemented, you'd just cash out your bank account every day, then tell the tax authorities you "spent" the money (in reality you keep a suitcase full of large bills under your mattress, but they have no way of knowing that). As long as you don't make a ton of money, and could conceivably be spending it on living well (vacations, movies, good food, alcohol, flowers for the significant other, etc.), how are they going to prove otherwise?
If you have more money, it gets more difficult to use that particular trick, but you'll also have more political power to get loopholes written into the law, and pay accountants to figure out how to make the loopholes work for you. And it'll also become more worthwhile to go to the trouble of keeping money overseas out of the range of taxation, or set up exotic financial structures like life insurance policies, trusts or derivatives, which don't have a definite value until they become payable.
I'm not an accountant, so some of the details might not be one hundred percent right, but it feels like that's a fair first approximation to what would happen.
> But there are bad taxes. There is such a thing as too much tax.
Having a wealth tax doesn't mean the total tax goes up. Normally when discussing the merits of a certain kind of tax it's best to assume another tax is cut, otherwise it invariably becomes a discussion about whether high/low/more/less taxes are good.
> A wealth tax would be hard / impossible to implement.
What do you think property taxes are?
I agree it would be really hard to tax all forms of wealth. But I'm fine with rich people hiding their wealth in artwork or stamps or whatever to save it from taxation. Keeps the money out of useful assets like stocks and houses.
> Looks at tax revenue vs GDP. No matter the tax rates, the percentage stays the same (fluctuations within a couple points) regardless of official tax rates.
That might perhaps be true over time, but it's not true between countries.
Eg Singapore has a much lower ratio of tax take to GDP than Germany.
> Universal sales tax is better. If the rich buy more stuff they pay more. There’s no loopholes to be found. You can also provide tax breaks to the poor by reducing or eliminating sales tax on consumer goods which greatly affects the poor, but only marginally affects the rich.
No need for a dual system, that just adds more loopholes. Just give pool people money, if necessary.
> I'm not convinced that it is NOT financially viable. Especially in Switzerland where the governance is exemplary compared to other countries.
It's not about the "quality" of your "governance", ie. "how satisfactorily you're enslaved". It's just that all money a government hands out to people has to come from somewhere, and each of the ways of acquiring the money has negative, compounding consequences.
> The fact that you equate taxation with extortion for example, shows that you have a different, not necessarily wrong, starting point than me.
True. But if you think about it for a moment, you'll realize it actually meets the criteria for extortion. You're handing over your money under threat of violence, even if the violence is X steps removed from where you are now.
No one would pay taxes without the threat of violence. If you were just asked nicely: "would you like to support yet another war in the Middle-East with a few thousand dollars?", you'd just decline and go on with your life, and that's exactly why they don't just ask nicely, they force you to pay.
> Most wealthy people don't have an issue paying taxes
What an unsourced and biased viewpoint :) a lot of wealthy people are routinely found evading taxes even in low-tax countries. Even the likes of Luxembourg and Monaco have to go after illegal tax avoidance. Nobody likes paying tax, even at 1% people would try to skim. Egoism is a natural element of human psychology.
> Why wouldn't I just move to Monaco
Indeed, why? It might have something to do with Monaco being a minuscule country and their citizens being subject to more restrictions when working or investing in larger markets. This is a friction that globalization has eroded (e.g. there are no such restrictions now for Luxembourg citizens accessing the EU market, or Delaware citizens accessing the US market), which is part of the problem. If you make money from a large and well-run market, you should pay your fair share towards maintaining that market, no matter where you haul from.
> The only reason to tax the rich as far as economic stimulation goes, is if you believe the Government can do better with the money than the market can.
I think this is a very important point. There's been an important ongoing debate in some European countries, on taxes paid vs. benefits provided by the state.
It's a natural tendency for some kinds of state to become increasingly dependent on tax money, be it through self-expansion (hiring more and more public servants) or provision of extra benefits to society. While this was no big deal in the post-WWII, it has become increasingly relevant with the consequent improvements in life expectancy and decrease in birth rate.
OTOH, the market is purely profit-oriented and profit is seldom in agreement with the public interest. "The rich" won't care to pay my unemployment benefits when I lose my job or my hypothetical child's health expenses.
> I find it quite disturbing that high taxation is seen as a negative aspect of Europe.
High tax rates and, in fact, ANY taxes area a negative. However, that negative is (hopefully) offset by the positives that the things those taxes go to pay for provide.
> Personally I disagree with the whole idea of wealth taxes, you should be taxed when you do things, not taxed just because you own something worth money.
I used to as well, but now I flipped. I don't think you should be taxed for doing things, I think you should be taxed for wealth. I think there should be no tax for working ( income ), buying things ( sales tax ), etc. Activity which promotes economic growth shouldn't be taxed. But wealth should be taxed. House/assets/etc should be taxed.
It's insane that you get taxed at 39% for work ( income ) but someone letting his money "do the work" gets taxed at 20% ( long term capital gains tax ).
> I should be able to go live in the woods alone and not have the government take some percent of my net worth just because I exist.
But the government protects your ability to do so. So no. Though I'd be in favor of governments setting aside land internationally where people are allowed to live "in a state of nature". They are not allowed to form tribes/governments, but are allowed to live "free" as they wish untaxed without the help of society.
> If I start a company and it gets valued at 30 million dollars, why should the government be allowed to force me to sell my company to pay their wealth tax?
Cause the company exists in a society governed/protected/etc by the government? It's the beneficiary of the environment.
> Now the government is going to force me to sell my car?
Nope. You could always go out and work to earn money to pay the wealth tax too and keep your car.
I'd be in favor of removing all taxes for one wealth tax.
> Many people share it explicitly. 99.99% of the people believe it somehow.
I think this is mostly a US-centric thing. In Europe taxes tend to be much higher and people mostly acknowledge that they are a necessary evil and when used appropriately they are good. How do you fund good roads, public illumination, universal healthcare, publicly-funded schooling, etc without everybody chipping in?
Sure, there are many discussions about how much people pay, about tax evading, about whether the systems in place are the fairest, etc. but in general from my experience (and personal opinion) they're not seen as theft.
Switzerland does it and it seems to work pretty well.
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